BASF has threatened to relocate research into 'green genetic engineering' to other countries if German law continues to restrict R&D into plant biotechnology, with applications as diverse as crop biomanufacturing of proteins and GM foods.
The German chemicals group said it hopes that an agreement can be reached with the Federal Government and the science and economics communities about the legal conditions of this genetic manipulation of crops.
Jürgen Hambrecht, chairman of BASF said that green genetic engineering is crucial to the future of humanity. In the year 2050, it will be necessary to feed a global population of 9 billion. This will only be possible with genetically refined plants, for example in desert or cold regions.
"The population's acceptance of "genetic food" will increase if its additional benefits are recognised, for example a higher vitamin content or a cholesterol-reducing effect. In 10 years, plant manipulation will be just as accepted as medical "red genetic engineering" is today," he stated.
BASF's comments have been whole-heartedly supported by the Genetic Engineering Law (GenTG), representatives of the German BioRegions. They said: "The Genetic Engineering Bill will kill innovation as the GenTG makes the use of plant biotechnology in Germany illegal." The Bill especially hinders the use of modern bio and gene technology in agriculture.
"Long-term investments in research and development will have been wasted, jobs and growth potentials will be destroyed and the image of Germany as being a country adverse to technological innovations will be strengthened further."
The relocation of its chemicals presence and investments in Germany, Western Europe and North America have largely been completed by BASF. The company is increasingly following its customers to low-wage countries, primarily in Asia.
For example, BASF has invested $3 billion (€2 billion) in its pharmaceuticals plant in Nanjing, China, which will exclusively serve the Chinese market. The plant will go into operation as planned in 2005.
BASF's expansion lends weight to the notion, voiced by a number of chemical executives around the end of 2003 that the sector could be bottoming out after a damaging period of weak demand, high raw materials prices and the damaging effects of a weak dollar relative to the euro.
Despite this Hambrecht has been quoted as saying he was optimistic about 2004, even though he expected the negative impact on the business of high and volatile raw materials costs and a relatively weak dollar to continue.
BASF is sticking to the target of reducing its costs by €1.5 billion annually up to 2006. This does not include research and development, which will continue to account for 3 per cent of turnover.